EDITOR’S NOTE: If you’ve been wondering whether there was any ceiling to the bizarre nature of securities-fraud cases as the white-collar fraud epidemic continues, it perhaps is best to stop wondering now . . .

A New York man has been accused by the SEC of using the proceeds of an unregistered offering for StratoComm Corp. to pay restitution owed in a previous criminal case.

Meanwhile, StratoComm’s outside counsel has been accused in Miami by the SEC of securities fraud amid allegations he knew StratoComm was under investigation but disclaimed knowledge of the probe in letters designed to ensure the firm’s stock would continue to be quoted on the Pink Sheets.

Attorney Stewart A. Merkin was sued by the SEC on Monday.

In a separate, unrelated case, a suburban Philadelphia man has been arrested on charges he solicited $4 million from an investor and “misappropriated at least half of it,” federal prosecutors in New York said.

Charged criminally with wire fraud in the case was Tyrone L. Gilliams Jr. Gilliams owned a company known as TL Gilliams LLC, prosecutors said.

Prosecutors said Gilliams’ victim believed the money would be used for investments in “treasury strips” — securities derived from U.S. treasury bonds.

Gilliams, however, peeled off more than $2 million, using at least $1.3 million of it to fund a black-tie gala at the Ritz Carlton hotel in Philadelphia last year. The event was dubbed the “Joy to the World” festival. Another Joy to the World event was held in the Bahamas, prosecutors said.

“His charade was funded by money he allegedly stole from an unwitting investor,” said U.S. Attorney Preet Bharara of the Southern District of New York.

Another $450,000 of the $4 million was used “to refund a deposit from a prior investor,” and more than $200,000 went to a real estate title company, prosecutors said.

Smaller sums went for other “improper purchases,” and Gilliams “wired approximately $1.6 million to Ghana, for what he has since claimed was an investment in gold,” prosecutors said.

“Gilliams misrepresented to an investor how solicited funds would be used,” said FBI Assistant Director-in-Charge Janice K. Fedarcyk.

In the civil case against Shearer and StratoComm, the SEC alleged that StratoComm, acting at Shearer’s direction and with the assistance of former StratoComm executive Craig Danzig, “issued and distributed public statements falsely portraying the company as actively engaged in the manufacture and sale of telecommunications systems for use in underdeveloped countries, particularly Africa.”

But the firm “had no product and no revenue,” the SEC charged, alleging that “Shearer and Danzig sold investors approximately $3 million worth of StratoComm stock in unregistered transactions.

“Shearer used much of that money for his own purposes, including paying a substantial part of the restitution he owed in connection with his guilty plea in a prior criminal proceeding,” the SEC said.

Merkin, StratoComm’s counsel, wrote “four attorney representation letters for posting on the website of Pink Sheets LLC and its successor, Pink OTC Markets, Inc.,” the SEC said. “In those letters Merkin disclaimed knowledge of any investigation into possible violations of the securities laws by StratoComm or any of its officers or directors. However, the SEC’s complaint also alleges that Merkin was representing StratoComm and several individuals in connection with the SEC’s investigation at the time.

“Nevertheless, in order that StratoComm’s shares would continue to be quoted, the SEC’s complaint alleges that Merkin falsely stated that to his knowledge StatoComm was not under investigation,” the SEC said.

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